Journal of Management & Governance

, Volume 20, Issue 2, pp 261–294 | Cite as

Business model in IPO prospectuses: insights from Italian Innovation Companies

  • Carlo Bagnoli
  • Giulia RedigoloEmail author


How do companies to be listed deal with the voluntary disclosure of their business model? Is it true that firms with greater intellectual capital resources and technological innovation endowments are less prone to full disclosure? This paper aims to examine the choices of voluntary disclosure of the business model made by three Italian manufacturing companies in initial public offering prospectuses. The objective is to explore whether any differences exist and may be related to the type of innovation underlying the firms’ business model. A series of interviews with the top management allows to deeply understand the business model of each company. A content analysis allows to measure the level of disclosure and identify the strategic concepts of the business model and their relevance. The study provides evidence that companies with a business model based on technology-push and design-driven innovation have a lower propensity to the full disclosure of their intangible resources, particularly of those based on knowledge as some could be also invisible. The paper contributes to the ongoing debate on the role of business and financial reporting.


Voluntary disclosure Business model Initial public offering Intangibles Innovation 


  1. Accounting Standards Board. (2006). Reporting statement: Operating and financial review. London: ASB.Google Scholar
  2. AICPA. (1994). Improving business reporting. A customer focus: Meeting the information needs of investors and creditors. Comprehensive report of the special committee on financial reporting. New York, NY: American Institute of Certified Public Accountants.Google Scholar
  3. Ashton, R. H. (2005). Intellectual capital and value creation: A review. Journal of Accounting Literature, 24(1), 53–134.Google Scholar
  4. Bagnoli, C. (2009). L’evoluzione delle strategie di disclosure volontaria delle imprese quotate italiane in un contesto di accresciuta incertezza ambientale. [The evolution of voluntary disclosure strategies in a context of increased environmental uncertainty]. Finanza, Marketing e Produzione, 17(3), 104–132.Google Scholar
  5. Bagnoli, C., & Mantovani, G. (2012). Voluntary disclosure strategies and the cost of capital of Italian blue chips. Journal of Business, Economics and Finance, 1(4), 49–94.Google Scholar
  6. Beattie, V. (1999). Business reporting: The inevitable change. Edinburgh: The Institute of Chartered Accountants of Scotland, ICAS.Google Scholar
  7. Beattie, V., & Smith, S. (2013). Value creation and business models: Refocusing the intellectual capital debate. The British Accounting Review, 45(4), 243–254.CrossRefGoogle Scholar
  8. Beattie, V., & Thomson, S. (2007). Lifting the lid on the use of content analysis to investigate intellectual capital disclosures. Accounting Forum, 31(2), 129–163.CrossRefGoogle Scholar
  9. Bozzolan, S., Favotto, F., & Ricceri, F. (2003). Italian annual intellectual capital disclosure: An empirical analysis. Journal of Intellectual Capital, 4(4), 543–558.CrossRefGoogle Scholar
  10. Brennan, N. (2001). Reporting intellectual capital in annual reports: Evidence from Ireland. Accounting, Audit and Accountability Journal, 14(4), 423–436.CrossRefGoogle Scholar
  11. Bromley, D. B. (1986). The case-study method in psychology and related disciplines. New York: Wiley.Google Scholar
  12. Bukh, P. N., Johansen, M. R., Meca, E. G., Mouritsen, J. (2002). IPO prospectuses as intellectual capital reports: A comparison of Danish and Spanish reporting practices. Working paper, The Aarhus School of Business, Denmark.Google Scholar
  13. Bukh, P. N., Larsen, H. T., Gormsen, P., Mouritsen, J. (2001). Disclosure of intellectual capital indicators in Danish IPO prospectus. Working paper, The Aarhus School of Business, Denmark.Google Scholar
  14. Bukh, P. N., Nielsen, C., Gormsen, P., & Mouritsen, J. (2005). Disclosure of information on intellectual capital in Danish IPO prospectuses. Accounting, Auditing & Accountability Journal, 18(6), 713–732.CrossRefGoogle Scholar
  15. Chavent, M., Ding, Y., Fu, L., Stolowy, H., & Wang, H. (2006). Disclosure and determinants studies: An extension using the divisive clustering method (DIV). European Accounting Review, 15(2), 181–218.CrossRefGoogle Scholar
  16. CICA. (2001). Management’s discussion and analysis. Guidance on preparation and disclosure. Review draft. Toronto: Canadian Institute of Chartered Accountants.Google Scholar
  17. Cordazzo, M. (2007). Intangibles and Italian IPO prospectuses: A disclosure analysis. Journal of Intellectual Capital, 8(2), 288–305.CrossRefGoogle Scholar
  18. Daily, C. M., Certo, S. T., Dalton, D. R., & Roengpitya, R. (2003). IPO underpricing: A meta-analysis and research synthesis. Entrepreneurship Theory and Practice, 27(3), 271–295.CrossRefGoogle Scholar
  19. Eccles, R. G., Herz, R. H., Keegan, E. M., & Phillips, D. M. (2001). The value reporting revolution: Moving beyond the earnings game. New York: Wiley.Google Scholar
  20. Edvinsson, L., & Malone, M. S. (1997). Intellectual capital: Realizing your company’s true value by finding its hidden brainpower. New York: HarperBusiness.Google Scholar
  21. EFRAG. (2010). The role of the business model in financial reporting. Project plan. Brussels: European Financial Reporting Advisory Group.Google Scholar
  22. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they. Strategic Management Journal, 21(1), 1105–1121.CrossRefGoogle Scholar
  23. FASB. (2001). Improving business reporting: Insights into enhancing voluntary disclosure. Business reporting research project. Norwalk, CT: Financial Accounting Standards Board.Google Scholar
  24. Financial Reporting Council. (2010). The UK corporate governance code. London: FRC.Google Scholar
  25. Flyvbjerg, B. (2006). Five misunderstandings about case-study research. Qualitative Inquiry, 12(2), 219–245.CrossRefGoogle Scholar
  26. Francis, J. R., Khurana, K. I., & Pereira, R. (2005). Disclosure incentives and effects on cost of capital around the world. The Accounting Review, 80(4), 1125–1162.CrossRefGoogle Scholar
  27. Francis, J., & Shipper, K. (1999). Have financial statements lost their relevance? Journal of Accounting Research, 37(2), 319–352.CrossRefGoogle Scholar
  28. Gioia, D. A., Corley, K. G., & Fabbri, T. (2002). Revising the past (while thinking in the future perfect tense). Journal of Organizational Change Management, 15(6), 622–634.CrossRefGoogle Scholar
  29. Govindarajan, V., & Gupta, A. K. (2001). Strategic innovation: A conceptual road map. Business Horizon, 44(4), 3–12.CrossRefGoogle Scholar
  30. Graham, J. R., Campbell, R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40(1), 3–73.CrossRefGoogle Scholar
  31. Guthrie, J., & Mathews, M. R. (1985). Corporate social accounting in Australasia. Research in Corporate Social Performance and Policy, 7(1), 251–277.Google Scholar
  32. Guthrie, J., & Petty, R. (2000). Intellectual capital: Australian annual reporting practices. Journal of Intellectual Capital, 1(3), 241–251.CrossRefGoogle Scholar
  33. Guthrie, J., Petty, R., & Ricceri, F. (2006). The voluntary reporting of intellectual capital: Comparing evidence from Hong Kong and Australia. Journal of Intellectual Capital., 7(2), 254–271.CrossRefGoogle Scholar
  34. Guthrie, J., Petty, R., Yongvanich, K., & Ricceri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5(2), 282–293.CrossRefGoogle Scholar
  35. Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure and the capital market: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1), 405–440.CrossRefGoogle Scholar
  36. IASB. (2009). International accounting standards board. IFRS 09 Financial Instruments. London.Google Scholar
  37. ICAEW. (2010). Business models in accounting: The theory of the firm and financial reporting. London: Institute of Chartered Accountants of England and Wales.Google Scholar
  38. Jenkinson, T., & Ljungquist, A. (2001). Going public: The theory and evidence on how companies raise equity finance. Oxford: Oxford University Press.Google Scholar
  39. Krippendorff, K. (1980). Content analysis. An introduction to its methodology. London: The Sage Commtext, Sage Publications Ltd.Google Scholar
  40. Lancia, F. (2004). Strumenti per l’analisi dei testi. Introduzione all’uso di T-lab. [Tools for text analysis. Introduction to T-lab]. Milano: Franco Angeli.Google Scholar
  41. Leitner, K. H. (2011). The effect of intellectual capital on product innovativeness in SMEs. International Journal of Technology Management, 53(1), 1–18.CrossRefGoogle Scholar
  42. Markides, C. (1997). Strategic Innovation. Sloan Management Review, 39(3), 31–42.Google Scholar
  43. Mather, P., Ramsay, A., & Steen, A. (2000). The use and representational faithfulness of graphs in Australian IPO prospectuses. Accounting, Audit and Accountability Journal, 13(1), 65–83.CrossRefGoogle Scholar
  44. Nielsen, C., & Bukh, P. N. (2011). What constitutes a business model: The perception of financial analysts. International Journal of Learning and Intellectual Capital, 8(3), 256–271.CrossRefGoogle Scholar
  45. Olsson, B. (2001). Annual reporting practices: Information about human resources in corporate annual reports in major Swedish companies. Journal of Human Resources Costing and Accounting, 6(1), 39–52.CrossRefGoogle Scholar
  46. Page, M. (2012). Business models as basis for regulation of financial reporting. Journal of Management and Governance, 18(3), 683–695.CrossRefGoogle Scholar
  47. Ravasi, D., Rindova, V., & Dalpiaz, E. (2012). The cultural side of value creation. Strategic Organization, 10(3), 231.CrossRefGoogle Scholar
  48. Roslender, R., & Fincham, R. (2004). Intellectual capital accounting in the UK: A field study perspective. Accounting, Audit and Accountability Journal, 17(2), 178–209.CrossRefGoogle Scholar
  49. Santos, F. M., & Eisenhardt, K. (2009). Constructing markets and shaping boundaries: Entrepreneurial power in nascent fields. Academy of Management Journal, 52(4), 643–671.CrossRefGoogle Scholar
  50. Schrand, C., & Verrecchia, R. E. (2005). Information disclosure and adverse selection explanations for IPO underpricing. Working paper, The Wharton School, University of Pennsylvania.Google Scholar
  51. Singleton-Green, B. (2012). Should financial reporting reflect firm’s business models? What accounting can learn from the economic theory of the firm. Journal of Management and Governance, 18(3), 697–706.CrossRefGoogle Scholar
  52. Stoecker, R. (1991). Evaluating and rethinking the case study. The Sociological Review, 39(1), 88–112.CrossRefGoogle Scholar
  53. Striukova, L., Unerman, J., & Guthrie, J. (2008). Corporate reporting of intellectual capital: Evidence from UK companies. The British Accounting Review, 40(4), 297–313.CrossRefGoogle Scholar
  54. Subramaniam, M., & Venkatraman, N. (2001). Determinants of transnational new product development capability: Testing the influence of transferring and deploying tacit overseas knowledge. Strategic Management Journal, 22(4), 359–378.CrossRefGoogle Scholar
  55. Subramaniam, M., & Youndt, M. A. (2005). The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal, 48(3), 450–463.CrossRefGoogle Scholar
  56. Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2), 172–194.CrossRefGoogle Scholar
  57. Upton, W. S. (2001). Special report. Financial Accounting Standards Board. Business and financial reporting: Challenges from the new economy.Google Scholar
  58. Verganti, R. (2008). Design, meanings and radical innovation: A metamodel and a research agenda. The Journal of Production, Innovation and Management, 25(5), 436–456.CrossRefGoogle Scholar
  59. Verrecchia, R. E. (2001). Essays on disclosure. Journal of Accounting and Economics, 32(1), 97–180.CrossRefGoogle Scholar
  60. Yin, R. K. (2009). Case study research: Design and methods. Thousand Oaks, CA: Sage publications.Google Scholar
  61. Zambon, S. (2003). Study on the measurement of intangible assets and associated reporting practices. Study prepared for the Commission of the European Communities Enterprise Directorate General, Brussels.Google Scholar

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of ManagementUniversità Ca’ FoscariVeniceItaly
  2. 2.Department of Economics and Management M. FannoUniversity of PaduaPaduaItaly

Personalised recommendations